Monday, April 4, 2011

Getting serious about spending cuts

As the budget battle heats up in Washington, the Cato Institute has been purchasing full-page ads in top newspapers (pdf) to highlight the laughable claim that cutting $61 billion out of the federal budget is "draconian" or "extreme." The tale is told simply in one chart:

If you can't make it out, the tiny portion labeled "proposed spending cuts" is just about 1.6% of the federal budget. Cato also produced a short video that makes the same point about spending:



See the full-page ad (pdf) which presents a list of hundreds of billions of dollars in spending cuts that the federal government could make in a few weeks. The sad fact is that even making every one of these cuts still leaves a significant federal budget deficit.

1 comment:

Hempy said...

The problem is not the budget; the problem is the morally, spiritually and economically unjust bankrupted Congress that refuses to recognize that the problem lies with the tax code. The current income tax serves only the wealthiest 1%.

Congress has declared wholesale war on working people everywhere. The wealthiest 1% don’t even begin to pay anything close to a proportional share of their revenue in taxes. In fact, 2/3rds of US corporations pay no taxes at all. More than likely it’s higher than that.

Mark Twain correctly observed that the Congress is a national asylum. It’s clear given the direction that Republicans, conservatives, Libertarians and teabaggers are trying to drive the county that the inmates have taken over the asylum. The philosophy of these groups is rooted and grounded in feudalism—take care of the lords of the manors and to hell with the serfs.

This is a guaranteed prescription for failure. It’s a guarantee of increasing job losses, lower paying jobs, a worsening of the housing market and a prescription for another double dip Great Recession that could tumble into a depression.

For an economy to thrive, money has to circulate. A fair and just tax system (based on proportion) is the only method that can guarantee that money will be kept in circulation and an economy kept sound. Cutting federal spending is not an answer.